DMAS Medicaid Memo Addresses Rate Changes

VHCA (9/3/10)

The Department of Medical Assistance Services (DMAS) is planning to publish this week a Medicaid Memo regarding the rate changes effective October 1, 2010 due to the additional Medicaid (FMAP) funding resulting from the passage of H.R. 1586 in mid-August.  DMAS has indicated that the Department does not intend to mail the memo.  Banners on the DMAS website and that of its fiscal agent – Affiliated Computer Services, Inc. (ACS), will direct providers to the memo.  DMAS plans to also include a message on provider remittance advices for the next few weeks directing providers to the ACS website for more information.  The first message will be on the remittance advice dated September 10, 2010.

DMAS implemented rate reductions effective July 1, 2010 affecting many providers as required by the 2010 Appropriation Act implementing the Commonwealth’s 2010-2012 biennium budget.  The Appropriation Act also directed DMAS to reverse some of these rate reductions if Congress extended through June 30, 2011 the additional federal funding for Medicaid originally included in the American Recovery and Reinvestment Act of 2009.  The Appropriation Act authorized modifications to the restorations consistent with available funding and the decision was made to rescind these rate cuts effective for dates of service from October 1, 2010 through June 30, 2011.  For nursing facilities, the rate reductions implemented July 1, 2010 will be rescinded on October 1, 2010 for the 3% reduction to operating rates and the reduction of the rental rate floor used in capital reimbursement.

Claims submitted with dates of service between July 1, 2010 and September 30, 2010 will be reimbursed at the reduced rates previously announced.  Effective for dates of service October 1, 2010 through June 30, 2011, the rate cuts will be rescinded and claims will be reimbursed at the rates that would have been in effect on July 1, 2010 in the absence of the above rate reductions.  Nursing facility providers will receive additional guidance regarding interim rates and cost settlement from DMAS in the near future.

The Appropriation Act still requires additional rate reductions for FY 2012.  Barring revisions during the 2011 General Assembly, these changes are scheduled for implementation effective July 1, 2011.  All providers, including nursing facilities, will receive additional communication regarding these or other changes prior to implementation. 

As a result of the additional Medicaid funding, the Governor has revised other changes not related to rates.  One key change that has been announced is that DMAS will continue to cover adult vision services.